ACC541 ACC/541 Learning Team Response to Client Request I - 19463

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  • From: Business,
  • Posted on: Tue 23 Jul, 2013
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Request Description

While working on a consulting engagement, a supervisor in your team has given you an assignment.  The client is a regional trucking company.  A new customer has approached the client with an opportunity that would require 120 trailers—20 more than the trucking company currently owns.  The client is uncertain how long the relationship with the customer may last, but the deal has the potential for significant growth.  Remember: The client is your concern not their potential customer.

 

Your supervisor has asked you to research leases and lease structure issues using the ASC.  You want to discuss capital leases.  This discussion should also include information on two sub-type leases that are capital leases.  They are direct financing and sales type.  Then you should present a separate discussion on operating leases.  You also want to provide information on current practices in leases and proposed changes.  Keep in mind the “client” has limited knowledge about leases.  

 

Write a 700- to 1,050-word “memo” to your “supervisor” that summarizes your ASC research results.  Assume the supervisor will make the presentation of your information to the client.  Keep the memo “brief” but substantive because the “client” and “supervisor” have limited time.  You do want to make a good impression through your memo.  You need to provide basic theoretical information from the ASC. You can supplement your ASC discussion with other qualifying source information.  You want to explain the requirement for the two main lease types – capital and operating.  In your discussion of capital leases, direct financing and sales type information should be include (they are capital leases).  Do not include information like journal entries.  Provide information on how each lease affects the financials (balance sheet, income statement, and disclosures).  You also want to make the client aware of some current practices and proposed changes (check for Article Link posting).  Recommend an approach the “client” can use to evaluate and capitalize on this opportunity.  Base it on the client’s potential situation, your research, and proposed changes.  You should also use this opportunity, in your conclusion to offer to assist the client if they want more information about leases and/or decide to lease the trailers.

 

Solution Description

MEMORANDUM

TO: Supervisor

FROM:

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